M&M which predominantly makes diesel vehicles, was one of the worst hit by this change in customer preference.MUMBAI: Indian conglomerate Mahindra and Mahindra (M&M) on Friday reported a decline of 3.4 percent in its net profit for the first quarter (Q1) of the current fiscal.

The company posted a net profit of Rs.852 crore for the quarter ended June 30, 2015 from Rs 882 crore for the corresponding period of last fiscal.

The gross revenues and other income of the company too decreased. It fell by 2.15 percent during the Q1. The income stood at Rs.10,629 crore for the quarter under review from Rs 10,863 crore during the like period of 2014-15.

The group's consolidated gross revenues and other income for the first quarter was marginally lower at Rs 19,816 crore from Rs 19,831 crore in the corresponding period of the previous year.

The consolidated net profit after tax, minority interest for the current quarter 19.12 percent to Rs 778 crore from Rs 962 crore in the corresponding quarter of the previous year.

The group also reported a decline of 2.42 percent in gross revenues and other income of the combined entity (Mahindra and Mahindra and Mahindra Vehicle Manufacturers) to Rs 10,474 crore as against Rs 10,734 crore in the corresponding quarter of the previous year.

The net profit of the combined entity for the current quarter was lower by 725 percent to Rs.831 crore from Rs.896 crore in the Q1 of 2014-15.

In terms of outlook, the company said that: "The Indian economy is gradually gaining momentum. Stalled projects are coming back online while new project announcements have picked up pace in the last couple of quarters."

"Capex trends are far healthier today than they were a year ago, which bodes well for future growth. While consumer demand remains weak, the better than expected rainfall received in the monsoon season thus far, provides room for optimism on this front as well."

Currently, the group comprises of 114 subsidiaries, 8 joint ventures and 15 associates. As per the full summation of gross revenues and other income of all the group companies taken together for the quarter ended June 30, 2015 stands at Rs.27,318 crore ($4.4 billion).

The company's scrip at the Bombay Stock Exchange (BSE) fell by 0.47 percent at Rs.1,387.65 from its previous close of Rs.1,394.25 per equity share.